By ELAINE KURTENBACH AP Business Writer
World stocks were mostly higher on Wednesday as European shares advanced despite fresh data showing the regional economic recovery may be faltering.
Surveys of purchasing managers by IHS Markit indicated business activity slowed in the region using the euro. Signs of strength in manufacturing were countered by weakness in the service sector, especially in places where coronavirus outbreaks are flaring, the report said.
Get a better way to read the daily news, sports, obituaries and more with the Ledger/LCJ daily newsletter HERE. Subscribe now for only $5 per month or $50 a year and receive the newsletter with exclusive content, the weekly newspaper and the Ledger’s e-edition.
The preliminary or “flash” composite purchasing managers index for the eurozone was at a three-month low of 50.1 in September on a scale of 1 to 100 where 50 marks the break between expansion and contraction.
However, the flash manufacturing PMI was at 53.7, a 25-month high, it said.
Britain’s FTSE 100 gained 2% to 5,948.48, while the DAX in Germany added 1.5% to 12,780.41. In Paris, the CAC 40 advanced 1.6% to 4,851.10. U.S. futures also augured gains for Wall Street. The future contract for the S&P 500 was up 0.3% while the future for the Dow industrials added 0.6%.
Investors are keeping a wary eye on how the coronavirus pandemic is affecting the economic outlook in the U.S. as well after the Federal Reserve chairman urged Congress to provide fresh stimulus for the U.S. economy.
At a House of Representatives committee hearing Tuesday, Powell said the economy appears to be improving, but some areas appear to be slowing after the expiration of extra weekly unemployment benefits and other stimulus that Congress approved in March.
“In fact, even as Fed Powell has sounded caution about the strength and steadiness of a recovery — contingent on ‘keeping the virus under control’ — the wider Fed positioning is not one of unbridled pipeline stimulus. And this may limit follow-through rallies in asset markets,” Mizuho Bank said in a commentary.
Tokyo’s Nikkei 225 trimmed early losses, closing 0.1% lower at 23,346.49 after trading resumed following a four-day weekend. The Hang Seng in Hong Kong edged 0.1% higher to 23,742.51. South Korea’s Kospi was almost unchanged at 2,333.24.
India’s Sensex gave up early gains to drop 0.8%, to 37,428.46, while the Shanghai Composite index added 0.2% to 3,279.71.
Australia’s S&P/ASX 200 jumped 2.4% to 5,923.90 after the government said retail sales fell 4.2% from the month before in August, much less than the 11% forecast, Marcel Thieliant of Capital Economics said in a commentary.
That was despite a renewal of lockdowns to battle coronavirus outbreaks in Melbourne and its surrounding Victoria state.
“The resilience of sales in Victoria underlines that people’s behavior is a more important driver of consumption trends than government restrictions,” Thieliant said.
Among other concerns for investors are rising tensions between the United States and China, which could lead to a Chinese retaliation against U.S tech companies.
Tensions flared Tuesday as President Donald Trump, in a very short virtual speech, urged the United Nations to hold Beijing “accountable” for failing to contain the virus that originated in the Chinese city of Wuhan and has killed over 200,000 Americans and nearly 1 million worldwide.
China’s ambassador rejected all accusations against Beijing as “totally baseless.”
Wall Street shrugged off an early slide Tuesday and the S&P 500 climbed 1.1% to 3,315.57, led by solid gains in technology and communications stocks, and companies that rely on consumer spending. Banks, health care and energy stocks closed lower.
Wall Street has lost momentum following months of powerful gains that brought fresh record highs. The benchmark S&P 500 index is down 5.3% so far this month, while the Nasdaq is off nearly 7%.
The 10-year Treasury yield was steady at 0.67%.
U.S. benchmark crude gave up 13 cents to $39.67 per barrel in electronic trading on the New York Mercantile Exchange. It rose 26 cents to $39.80 per barrel on Tuesday. Brent crude slipped 8 cents to $41.64 per barrel.
The U.S. dollar rose to 105.06 Japanese yen from 104.93 yen late Tuesday. The euro weakened to $1.1695 from $1.1710.